Prestige Sunglasses Pty Ltd v Bernhaut Nominees Pty Ltd

[1985] FCA 431

Re: PRESTIGE SUNGLASSES PTY. LTD.
And BERNHAUT NOMINEES PTY. LTD.; ADAM BERNHAUT and JOHN MICHAEL GAFFY, SUZANNE
MARGARET GAFFY and PARAWAY PTY. LTD (trading as JOHN GAFFY AGENCIES)
No. VG182 of 1985
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION
Jenkinson J.

CATCHWORDS

Trade Practices - Misleading or deceptive conduct - interlocutory injunctive relief - descriptive name for sun protection products - name well known - use of similar name for respondent's products - likelihood of mistaken belief by public that respondent's products are from the same source as the applicant's products - whether interlocutory relief ought to be granted.

McWilliam's Wines Pty. Ltd. v. McDonald's System of Australia Pty. Ltd. (1980) 33 A.L.R. 394

Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Pty. Ltd. (1978) 140 C.L.R. 216

Clarke v. Ryan (1960) 103 C.L.R. 486

Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. (1982) 149 C.L.R. 191

American Cyanamid Case (1975) A.C. 396

Trade Practices Act 1974 - ss. 52(1), 53(c)

HEARING

MELBOURNE
#DATE 3:9:1985

ORDER

Upon the first named respondent by its counsel undertaking that until the hearing and determination of this proceeding or further order it will keep true account of its sales and other dispositions in trade or commerce of each of the products for application to human skin with which it is or shall be concerned in trade or commerce and the name of which includes or shall include the word "Le" and will in keeping such account record all prices, quantities and descriptions of goods and all parties in respect of the said sales and dispositions It Is Ordered That:

1. The claims on the part of the applicant for the interlocutory relief specified in the application herein be dismissed.

2. The costs of each party of the hearing of the said claims be reserved.

JUDGE1

Application for interlocutory injunctive relief in respect of conduct which it is alleged would constitute a contravention of s.52(1) and s.53(c) of the Trade Practices Act 1974.

1. It is likely, as I think, that at the trial of this proceeding the following facts, which are asserted in paragraphs 2, 3, 5 and 6 of an affidavit sworn by Jack Gance on 2 August, 1985 and filed in support of the application, will be found:
   
   

"2. IN 1975 Jasam Administrators Pty. Ltd. commenced to manufacture or import, market and distribute various sun protection products. In 1979 it commenced to import and market sunglasses under the name and style of "Le Specs", "Le Specs Le Tough", "Le Drive" and "Le Metal". In August, 1982 the Applicant took over the business of Jasam Administrators Pty. Ltd. and commenced to manufacture, import, market and distribute its sun protection products. The shareholders and directors of both Companies are in substance identical. Since 1979 in excess of three million units of sun protection products have been sold under those names and under the names referred to in paragraphs 3 and 6 hereof. The Applicant distributes its sunglasses through all major department stores and approximately 4,000 pharmacies which represent some 80% of all pharmacies in Australia. The Applicant has thereby acquired a valuable reputation for its sunglasses and is widely known by its customers and the buying public as the supplier of such items under names with the prefix "Le".

3. SINCE 1982 the Applicant has marketed various sun tan and sun protection products through the outlets referred to above under the names "Le Tan", Le Tan Le Specs", "Le Tan Fast", "Le Lait", "Le Face Protection", "Le Tan Burn Relief", "Le Tan Sun Block Stick", "Le Tan Rapide Tan" and "Le Tan Mousse". These products have been introduced into the market during the period 1982 to 1985 commencing with "Le Tan" in 1982.

5. SINCE 1979 the Applicant has expended in excess of 11.5 million dollars in marketing, promoting, selling and otherwise publicising its sun protection products of which approximately 1.5 million dollars has been spent in marketing, promoting, selling and otherwise publicising the products referred to in paragraph 3 hereof since 1982. Promotion by the Applicant of its products is made through television, radio, beach promotions, sponsorship of fashion parades, shopping centre promotions, trade magazines and point of sale promotions ........ .... and point of sale video displays.

6. IN addition to the sun protection products referred to above, that is, sun tan products and sunglasses, the Applicant manufactures and supplies swimwear under the name 'Le Swimwear'."

1. The first respondent intends, unless restrained, to sell by wholesale to the retail vendors of the applicant's "suntan and sun protection products" (that is to say, bottled fluids and blocks of greasy solids the application of which to human skin is claimed to be beneficial to the health and the appearance of skin exposed to sun light) and to other retail vendors of like products, bottled fluids and blocks of greasy solids for which similar claims are made. The first respondent's intention, like that of the applicant in relation to its products, is that the purchasers of the products should offer them for sale by retail to the public in the shops the purchasers occupy. The get-up of the bottles and other containers in which the first respondent's products are intended to be packaged is not similar to the get-up of the bottles and other containers in which the applicant's products are sold. It is the choice of names under which the first respondent intends that its products shall be offered for retail sale that is alleged to constitute misleading conduct. The names are "Le Block", "Le Sun", "Le Stick" and "Le Moist". Although the nouns "Block" and "Stick" are found in the names of the applicant's products, it is by the demonstrative adjective "Le" that the applicant's products are alleged to have become known by the public as the products of a single supplier and as desirable articles of personal use. Members of the public will think the first respondent's products desirable and from the same supplier, it is alleged, because those products' names include that adjective.

2. Unlike the articles of commerce under consideration in McWilliam's Wines Pty. Ltd. v. McDonald's System of Australia Pty. Ltd. (1980) 33 ALR 394, the applicant's products which are for application to the skin and the first respondent's products have the same general function. (The first respondent has been marketing "appetite control tablets" and "a fibre supplement tablet" under the names "Le Trim" and "Le Fibre" respectively, but has not previously marketed products for application to the skin.) It may be that some members of the public would suppose the first respondent's products to be those of the entity which had previously been marketing similar goods under names commencing with "Le", and that the supposition would form in the minds of those members of the public without the influence of any of the "erroneous ideas" or "erroneous assumptions" which are discussed in reasons for judgment in that case, but under the influence merely of the notion that by the prefix "Le" a known brand of goods for application to the skin was to be identified.

3. Mr. Macaw of counsel for the respondents submitted that an appropriation of the definite article, even the definite article of a foreign language, tends to a more intolerable monopoly of language than appropriation of descriptive words, and that the reasoning of Stephen J. in Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. (1978) 140 CLR 216 was adaptable to demonstrate that so frequently used a tool of all language as the definite article could not be regarded as indicative of any trader's goods.

4. It may, however, be said that a word imported from another tongue, and not previously much used in English, can by use in the names of goods identify itself with the goods so far in the public mind as to make misleading its later use in the names of the similar goods of another.

5. The first respondent's products have not been offered for retail sale. The only evidence that the names have misled persons into an erroneous belief that the first respondent's products are the applicant's products was the evidence of one of the applicant's directors concerning information received by him from pharmacists that they had been so misled. This evidence lacked persuasiveness. I excluded, upon objection by Mr. Macaw, evidence of the director's belief upon information received by him from pharmacists that their customers would be misled. Neither the subject nor the pharmacists were within the ambit of the rules relating to the admissibility of expert opinion and the evidence was not formulated as an expression of the pharmacist's past experience of customers' misconceptions. (See Clark v. Ryan (1960) 103 CLR 486 at 490-491.)

6. The relevant facts, so far as they can presently be known, are not the subject of conflicting evidence : what is in question are the conclusions. In particular, the question which arises is whether, if, as I think likely, some members of the public do think the first respondent's products to be from the same entity as has been marketing similar products under names which, like the names of the first respondent's products, include the word "Le", that will be a consequence of conduct of the first respondent "likely to mislead or deceive", or whether on the other hand that will be, in law, a consequence of conscious or subliminal mental processes which make it wrong to describe those members of the public as "reasonable". (See Parkdale Custom Built Furniture Pty. Ltd. v. Puxu Pty. Ltd. (1982) 149 CLR 191.) As to that, there is in my opinion a serious question to be tried, and not the less serious and difficult because it may be a question of law rather than fact.

7. This is not quite such a case as Lord Diplock had in mind when he observed, in the American Cyanamid Case (1975) A.C. 396 at 408:
   
   

"If the defendant is enjoined temporarily from doing something that he has not done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the date at which he is able to embark upon a course of action which he has not previously found it necessary to undertake; whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at the trial."

The first respondent has extensively publicised, among retailers and those who distribute products of the kind in question to retailers, the proposed launching of its products in September 1985. Arrangements have been made with large wholesale suppliers to pharmacies for the provision by them of credit to retailers who purchase the first respondent's products. If the first respondent is enjoined from fulfilling the expectations of the launching of its products which it has assiduously excited in the trade, its goodwill is likely, according to credible evidence, to be seriously damaged in that trade. But the calculation of damage of that kind would be very difficult. I think that the balance of convenience inclines to refusal of interlocutory relief, if the first respondent is prepared to undertake that it will keep accounts of the sales of its products until the hearing and determination of the proceeding.

1. The order which I would be prepared to make is:

2. Upon the first-named respondent by its counsel undertaking that until the hearing and determination of this proceeding or further order it will keep true account of its sales and other dispositions in trade or commerce of each of the products for application to human skin with which it is or shall be concerned in trade or commerce and the name of which includes or shall include the word "Le" and will in keeping such account record all prices, quantities and descriptions of goods and all parties in respect of the said sales and dispositions it is ordered that the claims on the part of the applicant for the interlocutory relief specified in the application herein be dismissed and that the costs of each party of the hearing of the said claims be reserved.